Economy

Tamil Nadu’s MGNREGA Workers Left in the Lurch Due to Delayed Wages, Unused Funds

In 2016-17, pending payments under the employment scheme in the state amounted to a whopping Rs 5,571 crore.

Representative image of MGNREGA workers. Credit: Wikimedia Commons

Representative image of MGNREGA workers. Credit: Wikimedia Commons

Tiravur, Tamil Nadu: “I could kill someone,” said Janaki Chinarasu in early June at her home in Tiruvarur, protecting her forehead from the heat with her hands askew. “It’s like the sun god has conspired with the rain god to punish us.”

Chinarasu is a frail, strong-witted woman with a five-year-old on her lap and a husband hovering around, looking for a washcloth to go out to work. She fantasised about her life as a farmer’s wife in the past before the unforgiving drought struck in the summer of 2016. “How we used to accidentally drop rice and then just clean it up. Now we have to eat it from the floor even if a few grains drop,” she said, feet gliding across the red oxide floor of her hut to turn off the gas stove.

Tiruvarur, among other drought-hit districts in Tamil Nadu, is uniquely miserable for holding the position of the district closest to the Cauvery delta. Here, the people are especially bitter owing to the Cauvery water crisis that reached a crescendo last year.

In August 2016, protests erupted in Tamil Nadu after Karnataka did not release Cauvery river water to Tamil Nadu. In October, the Karnataka government, backed by a state assembly resolution, refused to release water to Tamil Nadu in compliance with the Supreme Court directive to release 6,000 cusecs of water for six days. After the final hearing on the issue by the Supreme Court in March, Tamil Nadu, Kerala and Karnataka presented their appeals on the 2007 Cauvery water dispute tribunal. Karnataka was clear that the share of 2,000 cusecs of water will not be released to Tamil Nadu due to shortages in their own state’s water reservoirs.

The failure of the monsoon was the next big blow to the farmers of Tamil Nadu. Hit by the drought, 254 farmers committed suicide, according to a petition filed in the Supreme Court by farmers associations. But the Tamil Nadu government, in its reply to the court in April 2017, said there were no farmer suicides due to drought in the state.

In Thanjavur, Tiruvarur, Ariyalur, Perambalur and Nagappattinam, farmers took to the streets demanding a drought relief fund as they were unable to repay their crop loans.

Janaki is in a debt trap, one that runs deep. Her silhouette disappeared into the barely-lit kitchen, and she leafed through the lightweight green folder containing the documents that pledged her home to the local moneylender. “We can’t trust the banks, you know. Our two acres of land could fetch us some money if we went for the crop insurance scheme, but now that private banks are involved, the premiums are higher, we have nowhere to go if our crops fail. So the MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act) is the only recourse,” she said. “But [it is] all work and no money.”

Delayed payments 

Tamil Nadu has forgotten to pay its workers the wages due to them under the MGNREGA scheme. Since 2015, the state had stopped releasing payments. So much so, that in the fiscal year of 2016-2017, the pending dues were at a whopping Rs 5,571 crore.

After a series of continual reminders from the Centre, the state government has finally cleared dues up to September 2017.

The slide began after the year 2012-13, the second year of late chief minister J. Jayalalithaa’s tenure when she romped home with a massive mandate. Between 2012 and 2014, the chief minister was preoccupied with the last leg of her 19-year-old corruption case being heard in a trial court in Bengaluru. Governance took a hit. In 2014, Jayalalithaa was jailed in Bengaluru and forced to step down as chief minister. Subsequently released on bail, her health worsened and in December 2016, she breathed her last after over two months in hospital. In the midst of all of this political drama, MGNREGA workers like Janaki were forgotten.

Magnitude of the gap

Take a look at the numbers. A person day is the day in which an average person can complete one day’s work. Tamil Nadu is hard at work and despite the highest number of person days amongst the five southern states, it had the most delayed compensation and the most payment delays, until July 2017.

States calculate labour projections in terms of person days. If three workers are expected to work on building a check dam over three days, this is estimated to be 3 x 3 = 9 person days. The government then derives what will be the cost for one person day in terms of paying wages, adds the cost of material to it and allocates funds accordingly. In Tamil Nadu, households having completed the requisite 100 days make up almost half of the person days generated.

The state also performs abysmally in terms of compensation for delayed payments, keeping up with the complaints of those under the scheme who have not received payments for over a year. The other states barely paid Rs 5-20 crore in terms of compensation delayed payments, leaving Tamil Nadu, as of July 2017, with the highest number of Rs 433.7 crore.


Also read: Jharkhand’s MGNREGA Workers Need a Lot More Than Political Slogans


Government records show that Rs 441 crore worth of compensation was due to workers for delayed wages in the financial year 2016-17. Out of this, the government approved the compensation of only Rs 17.15 crore and has paid Rs 10.7 crore so far. Karnataka came in second in terms of quantity of compensation for delayed payments, but it’s amount was less than a quarter of Tamil Nadu. The rest of the states are merely crumbs of the pie in comparison. Tamil Nadu takes almost the whole pie.

It is not as if the state had no money to make the payouts. Tamil Nadu had Rs 161 crore of unused funds. All other states in the south had used more than their allocated funds under the MGNREGA, with Telangana having used funds the most, over Rs 800 crore in excess of allocations.

Women suffer more

Kerala has the highest percentage of women in the workforce at 91%, and Tamil Nadu follows closely at 85.6%. Both states have been facing severe drought conditions for the past year, in particular, leaving women to take to the MGNREGA programme to make ends meet. In the fiscal year of 2016-2017, Tamil Nadu topped the southern states in terms of funds allocated, at Rs 4,431 crore. Karnataka comes second at Rs 3,423.1 crore and Kerala and Telangana follow.

But in Nagapattinam, a bevy of women strolled to lunch in the simmering afternoon heat, their tiffin boxes hanging loosely from their nimble fingers. “We had no work today. We just sat around and talked about our jobless drunkard husbands and mothers-in-law,” says Panimalar Ganapathy, her crows’ feet lifting from a carefully measured grin. Panimalar is 50 and tired and rallies the crowd to string together a half-hearted protest. “Kaasu kudukala na, mannu thaan sapda mudiyum (If they don’t give us money, we can only eat earth),” she cried, her sister cheering her on and hissing at the women to speak up. Panchayat president Karthik Mani bears the brunt of these demands

“If you don’t have any money in the first place even at the panchayat level, what do you do? There are lots of places where they intentionally reduce the work and the collectors say they don’t come for work. Twenty people can’t be given the job of planting one tree,” says Mani.

Keezhvalur panchayat leader Ganapathy Jayakumar also has concerns about the keeping of accounts. “The government likes it if 100 people have accounts in the same bank, but the reality is, everyone has accounts in different banks. Since 2013, a micromanagement process has been put in place to divide the responsibility of giving work and distributing money. A separate clerk is responsible for the accounts while the panchayat leaders handle the job of distribution of work. Micromanagement has affected the pace of work and compensation, and the lack of data keeping despite delegation of duties has been troubling. As a result, all the work falls on the panchayat leaders,” laments Ganapathy.

“The state government has an incentive to not provide work, since states have to pay compensation due to delay in payment of wages,” says Madhumati S. of the Mazdoor Kisan Shakti Sangathan.

“The Centre divides the budget of Rs 48,500 crore based on the previous year’s performance of states. While they aren’t allowed to cut the budgets, they continue to do so. By this time, the amount that goes to gram panchayats is much lesser than expected and workers are not paid on time because of the lack of sufficient funds. On top of this, the budget must ideally keep up with inflation, but it almost never does. Real-time allocation is just as important,” she adds.

Tamil Nadu had Rs 161 crore of unused funds in the financial year 2016-17. Credit: Reuters

Tamil Nadu had Rs 161 crore of unused funds in the financial year 2016-17. Credit: Reuters

The Centre’s stand

In a performance analysis letter in February 2017 by Aparajita Sarangi, national coordinator of the MGNREGA programme, to Hansraj Verma, the secretary of the Tamil Nadu’s Department of Rural Development, the delay in payment of wages was considered “alarming” and the state was requested to immediately attend to the issue. “Tamil Nadu is one of our good states. We have been to the state recently and, we are in constant touch with them,” said Sarangi in July 2017, adding, “The off-take is quite high and we have good works on the ground.”

She acknowledged that the only concern is the delay in payment of wages. “Because the measurements are not done on time, it is one of the worst states in terms of this.” Wages are supposed to be generated within eight days of the muster roll closure and Sarangi has given the state a deadline that the measurements should be done within five days.

Finally, after frantic reminders from Sarangi, the state government coughed up the money. K. Baskaran, director of Tamil Nadu Rural Development and Panchayat Raj department, said that 99.4% of the wages were released on time and Tamil Nadu was the first in the country to release wages.

When confronted with the data from the official MGNREGA website, he says, “All the funds depend on the sanction by the central government. Our work ends when we generate the wage list at the block level.”

When asked about Tamil Nadu topping the southern states in terms of unused funds and compensation for delayed payments, he said, “This could be the measurement of the current status of wages release. There is obviously a gap between the previous year’s release and the current year’s. The data must have taken that into account and therefore, there must have been a spike in the numbers. We will release the funds in the second week of October for this year.”

While news reports earlier this month claimed that the Centre had frozen MGNREGA payouts to 19 state governments including Tamil Nadu, the Centre and the state say there is no paucity of funds.

Here’s how the payment mechanism works. Fund Transfer Orders are issued by Centre. Two signatories from each state have to sign these. Following this, the payments have to be credited to the states. Independent researchers say it takes a minimum of ten days for the amount to be credited. And this is because the National Electronic Fund Management System, the government’s flagship initiative to transfer funds to the state government without any middlemen, has not taken off yet.


Also read: Central Panel Says No MGNREGA Pay Hike Needed to Match Minimum Wages


These delays in crediting money to states are, however, not considered as delays by the Centre. Only delays on the part of the state government in disbursing payments to the beneficiaries’ bank accounts are taken into account and shown as delayed payments.

As of November 2017, the information system shows a 99% pendency overall in the entire country. Tamil Nadu’s unpaid wages stand at 91.48% as of November. After clearing its three-year backlog of payments in September, Tamil Nadu has paid 8% of unpaid wages and compensation for delays in October and November to its MGNREGA beneficiaries.

Sarangi says it was simply an issue of the pendency rates not being reflected in the information system. “We have enough money, so there are no issues of lack in Centre’s funds. No funds have been frozen for any of the 19 states,” she says.

But her claim is surprising since the MGNREGA information system is updated real-time and since September 1, 2017, the pendency rate has stood at above 90% for the whole of India. She promised to rectify the error and reiterated that there was no paucity of funds. “We’ve cleared state claims as quickly as possible and the issues lie in the MIS report update on the information system. As of now, all audit reports except for Andhra Pradesh and Karnataka, which is yet to submit their reports, have been cleared. There is no problem. And Tamil Nadu is one of our best performing states,” she adds.

But back in Tiruvarur, Janaki has no idea about the enormous bureaucratic machinery that is being moved rather reluctantly and upon which her fate hangs. Janaki sweeps the shed and undoes the cow leash for a minute. She looks up whilst sweeping and smiles, the sweat glimmering on her supple skin. She pauses, trying to remember her words, and exclaims at the thought of her memory coming back. “Ah! This is what I wanted to say – isn’t it odd when you are going around saying the same things everyday to officials, to people around you and then you’re struggling to remember those words later on?” she wonders. She apologises and collects her thoughts again. “All I wanted to say is they have forgotten us. We stand in front of them and they just walk through us. Just wiped us out of their minds. If we don’t exist, whom do they have to pay money to? The air? We are born ghosts, we will die ghosts,” she shrugs.

Divya Karthikeyan is an independent journalist based in Chennai.